The outbreak of violence in Zhanaozen, a small oil town in Western Kazakhstan, has caused people to sit up and notice that Kazakhstan, despite its carefully cultivated reputation as a stable modernizing state, is not immune to social upheaval (if it has ever been) and that some internal discontent is brewing within the country. However, because of the fairly peripheral position of Zhanaozen on the national stage, the real contours of the conflict have not been discernible even to those inside the country and clearly cannot be so easily explained by any of familiar scenarios which have been in the air since the velvet revolutions occurred in Ukraine, Georgia, and Kyrgyzstan and since the eruption of the Arab spring.
The riots and subsequent clashes with police coincided with Kazakhstan’s Independence Day of December 16. For seven months prior to the disturbances, oil workers of the OzenMunaiGaz, a subsidiary of the national company KazMunaiGaz, had been engulfed in a bitter dispute with both the company and the government over regional and industrial hardship coefficients. The whole fiasco seems to have started from a simple misunderstanding.
A new jurist for the oil workers union, Nataliya Sokolova, who formerly worked as a head of the HR department with KarazhanbasMunaiGaz, a nearby oil company, jointly controlled by national Kazakh and Chinese oil companies, informed the workers that they had been underpaid the regional hardship coefficient. The workers initiated litigation during which it was found that they had, in fact, been paid the coefficient in full but had been misled by their jurist, Nataliya Sokolova, as to how this coefficient should be calculated. They were told that that their current wages in their totality should be multiplied by the coefficient, which would make them double. In a well-covered in the opposition media and highly controversial case which unfolded in the summer, Sokolova was charged with incitement to social hatred and sentenced to 6 years in prison. As a result, the majority of OzenMunaiGaz workers returned to work (OzenMunaiGaz employs about 9000 people) although a significant proportion of them – about 1300 workers – continued the strike and, after demanding reimbursement for the coefficient payments, were subsequently fired, whereupon they went to “occupy” the town’s main square now demanding re-installment to their previous positions with OzenMunaiGaz. Several negotiations and mitigations of the conflict initiated as recently as November by the Ministry of Labor and Social Security have been inconclusive.
The general mood in the oil town was gloomy throughout the fall. The December 16 riots started from the town’s main square – the site where the strikers had gathered and from where city administration had planned to organize the usual Independence Day program. From extensive footage of the opposition K+ channel (owned by self-exiled former Kazakh oligarch, Mukhtar Ablyazov) which has been stationed in the area since spring, together with official footage from the Attorney General’s office, and from amateur footage shot by onlookers, we know that the violence erupted on the square with the beating of a police major, the smashing of stage equipment, and the burning of the Christmas tree. After several administration buildings had been attacked and set on fire, including the office of OzenMunaiGaz, the municipal office (akimat), the bank, the hotel and several shops, the police re-grouped and used live bullets to disperse the protestors. 16 people were confirmed to have been killed in the clashes and ensuing violence in the town.
Police claim that they were shot at and that there was real danger – not only to themselves but also to other citizens in the vicinity. Three criminal cases have been opened to investigate possible excessive use of firearms by the police, and dozens of criminal cases have also been opened to investigate any conspiratorial elements and organization behind the rioting, arson, beating of police officers, and looting. The situation was somewhat pacified with the arrival of the President at the scene of the clashes, amidst promises that the families of those who were killed would be paid retribution to the tune of approximately 6,700 USD (1 million tenge), regardless of how and when they died, and oil workers would be re-employed.
A government commission to address grievances and to improve the living and working conditions of the Zhanaozen citizens has been created and has conducted several working meetings with residents and laid off oil workers. Towards the end of December, 1,622 workers have been re-employed, and are now getting paid even though there are, as yet, no ready jobs for them to fill. In an interview with several Kazakh bloggers, the official representative of the KazMunaiGaz, Alik Aydarbayev, said that they are planning to open a new drilling company in Zhanaozen in order to permanently employ workers. The wages of OzenMunaiGaz oil workers, including those employed in supporting services as drivers and unskilled workers, are already the highest in the country starting from about 1000 USD for the low-skilled and averaging 1700-2000 USD for highly-skilled workers.
The roots of the problem are manifold but the one with which almost all experts seem to agree is that of rising claims and entitlements to the “oil pie.” Oil revenues constitute a quarter of the Kazakh government’s budget (a part of the revenues also goes to the National Oil Fund) and people in the oil towns of the Western region are well aware that these oil revenues which, among other things, help to build Astana and fund other modernization projects around the country, come from their land. While the expectations of aspiring middle classes are being gradually fulfilled in Kazakhstan, there remain pockets of discontent. The crisis of rising expectations is spreading in Kazakh society starting from highly qualified government-sponsored students who, having graduated from prestigious American and British universities, return home expecting prestigious jobs with world compatible salaries, to that of the low-skilled oralmans (Kazakh government sponsored ethnic Kazakh repatriates) and rural migrants who flock to the oil towns in the hope of high-paid jobs available in the oil industry.
The labor dispute which led to the violence in Zhanaozen was the first case where the demands of the Kazakh oil workers for higher wages were firmly refuted and found illegal in court leading to tragic consequences. For many years, wages in the oil industry have been rising steadily; however this rise in wages has gone unmatched by the comparable rise in the quality of life for the people of the Mangystau region. One reason for this is the lack of infrastructure for the money to “stick.” While KazMunaiGaz paid high wages to its employees, social investment in the town lagged behind not in the least because of the exploding population growth. Despite the fact that oil production in Zhanaozen had already peaked in Soviet times, the population continued to increase doubling from 60,000 in 2000 to almost 120,000 today. The cost of living in the town, where everything has to be delivered, also remained high. On top of this, many Zhanaozen workers landed themselves in debt by taking home loans wherewith to buy apartments in Zhanaozen and in the regional center of Aktau. Needless to say, many rural migrants now employed in the oil industry lack cultural capital and professional skills. And the efforts at their socialization and professionalization by the government and by KazMunaiGaz remain dismal. The distortions of the oil industry are unmediated in Zhanazoen creating a culture of the oil frontier where all kinds of people come to make money –not to live. To an observer, there exists a clear gap between the white-collar and blue-collar employees of KazMunaiGaz and its subsidiaries. The white-collar employees come from the well-educated often western-educated elites who are often re-moved from the realities of the region and the people on the ground. Expectations from oil revenues distribution are very high and the public company which, unlike other companies, employs only Kazakhstani workers and pays them high wages is blamed for nepotism and flagrant mismanagement from top down.
Anger directed at the KazMunaiGaz “fat cats,” however, does not translate into wholehearted support for the oil workers in Zhanaozen. While many in the opposition camp at home and abroad are seen as being quick to jump on the bandwagon of any protest of any ideological stripe whatsoever, from proletarian solidarity to regionalist and tribal grievances, as long as it is against the current regime, it is also remarkable that quite a sizable number if not a majority of the commentators on the Kazakh web sites, while mourning the tragedy and loss of life that befell Zhanaozen, have little sympathy with the plight of the oil workers. There is vigorous debate in society as to whether their demands are justified (especially considering wages and salaries in other regions), and whether, like in the case of government-funded Kazakhstani students who graduated from Western universities, the state itself has not created the expectations it cannot fulfill. By showering money and public goodies on the rebelling town, the government, these commentators and analysts believe, is creating a moral hazard and opening a Pandora’s box of competing claims and demands impossible to fulfill. Also, investment in the wider population of Kazakhstan in stability and order should not be underestimated. Stability, peace and order is not just a matter of reputation for the regime, it is a basis of the “moral order” upon which the aspiring middle classes plan to build their lives. Many people in Kazakhstan realize that inter-ethnic and inter-regional agreement is not to be taken for granted and resent the tactics of the oil workers who, in pursuit of narrow interests are seen as ready to jeopardize the stability of the region and the whole country.